Observations of the ionosphere at the Huancayo and Watheroo magnetic observatories during the great magnetic disturbance of March 24, 1940, are shown and discussed. At Huancayo, the ionospheric disturbance began about 40 minutes before the first really large magnetic change, though coinciding with increasing magnetic activity. During the first great magnetic changes, the F2‐layer was swept upward and disappeared in about 30 minutes. At the same time, ion‐density of the E‐layer rose about 40 per cent.Growth of a “new” F2‐layer began after disappearance of the old, proceeding in an apparently normal manner for the next hour. Because the original ion‐density had been reduced to a low value, the F2‐region is regarded as a nearly un‐ionized atmosphere, suddenly exposed to solar radiation. Effective recombination‐coefficient and rate of ion‐production at level of maximum density of F2‐region are estimated from this growth. This yields approximate values of α = 1.8 × 10−10 and q0 = 230. These values must be somewhat larger, and must increase downward, if height‐change during growth of the layer is to be explained without electron‐transport during the interval.Steady growth of the new F2‐layer was followed by a succession of abnormal increases and decreases of ion‐density of diminishing amplitude at an almost regular period of three hours for three and one‐half or four periods. Abnormal rate of decrease and subsequent increase of abnormal electron‐production at level of maximum is computed for the first period. This varies between −1000 and +1700 electrons per cc per second.At Watheroo Magnetic Observatory ionospheric changes followed the general pattern usually experienced during magnetic disturbances in temperate zones. Evidence indicates large spatial tilts of iso‐ionic surfaces near Watheroo about 40 minutes after beginning of great magnetic changes. These spatial tilts were followed by rapid rise of height and increase of scattering.Abnormal decrease of ion‐density of the F2‐layer at both observatories began simultaneously, within observational limits, less than 15 minutes after the first great geomagnetic change. The great rise in height at Watheroo lagged behind that at Huancayo by nearly an hour. A chronology of radio fade‐outs and bright chromospheric eruptions before and during the storm is given.